Dollar Tree Updates FY16 Guidance; Shares Surge As Q3 Profit Tops Estimates

(RTTNews) - Dollar Tree, Inc. (DLTR) announced the company now anticipates net income per share for 2016 will range between $3.67 and $3.76. This compares to the company's previous EPS guidance range of $3.67 to $3.82, which did not include the $0.09 per share of expenses related to debt refinancing incurred in the third quarter of 2016.

Consolidated net sales for full-year 2016 are now expected to range between $20.67 billion and $20.77 billion compared to the previously expected range of $20.69 billion to $20.87 billion. The estimate is based on a low single-digit increase in same-store sales, and 3.9% square footage growth.

For the fourth quarter of 2016, Dollar Tree said its earnings per share are estimated to be in the range of $1.24 to $1.33, an increase from the prior implied guidance of $1.21 to $1.30. The company estimates consolidated net sales to range from $5.59 billion to $5.69 billion, based on low single-digit increases in same-store sales for the Dollar Tree and Family Dollar segments.

For the third-quarter, Dollar Tree earned $171.6 million, or $0.72 per share. The company noted that, after adding back $0.09 per share of expenses related to debt refinancing, operating performance of $0.81 per share was near the top end of its third quarter EPS guidance range of $0.76 to $0.82. On average, 21 analysts polled by Thomson Reuters expected the company to report profit of $0.78 per share, for the quarter. Analysts' estimates typically exclude special items.

Third-quarter net sales increased 1.1% to $5.00 billion from $4.95 billion in the prior year's third quarter. The prior year's quarter included sales from 325 Family Dollar stores that were divested following the third quarter of 2015. Same-store sales increased 1.7%, on a constant currency basis. Adjusted for the impact of Canadian currency fluctuations, the same-store sales increase was 1.8%. Analysts expected revenue of $5.08 billion, for the quarter.

During the quarter, the company opened 153 stores, expanded or relocated 39 stores, and closed 10 stores. As part of its re-banner initiative, the company opened 42 former Family Dollar store locations as new Dollar Tree stores. Retail selling square footage at the end of the quarter was approximately 112.0 million square feet.

Shares of Dollar Tree, Inc. were up more than 7% in pre-market trade on Tuesday.